Correlation Between Arctic Blue and Neola Medical
Can any of the company-specific risk be diversified away by investing in both Arctic Blue and Neola Medical at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Arctic Blue and Neola Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arctic Blue Beverages and Neola Medical AB, you can compare the effects of market volatilities on Arctic Blue and Neola Medical and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Arctic Blue with a short position of Neola Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arctic Blue and Neola Medical.
Diversification Opportunities for Arctic Blue and Neola Medical
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Arctic and Neola is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Arctic Blue Beverages and Neola Medical AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neola Medical AB and Arctic Blue is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Arctic Blue Beverages are associated (or correlated) with Neola Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neola Medical AB has no effect on the direction of Arctic Blue i.e., Arctic Blue and Neola Medical go up and down completely randomly.
Pair Corralation between Arctic Blue and Neola Medical
Assuming the 90 days trading horizon Arctic Blue Beverages is expected to under-perform the Neola Medical. But the stock apears to be less risky and, when comparing its historical volatility, Arctic Blue Beverages is 1.7 times less risky than Neola Medical. The stock trades about -0.43 of its potential returns per unit of risk. The Neola Medical AB is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 254.00 in Neola Medical AB on August 29, 2024 and sell it today you would earn a total of 18.00 from holding Neola Medical AB or generate 7.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arctic Blue Beverages vs. Neola Medical AB
Performance |
| Timeline |
| Arctic Blue Beverages |
| Neola Medical AB |
Arctic Blue and Neola Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arctic Blue and Neola Medical
The main advantage of trading using opposite Arctic Blue and Neola Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arctic Blue position performs unexpectedly, Neola Medical can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Neola Medical will offset losses from the drop in Neola Medical's long position.| Arctic Blue vs. Invisio Communications AB | Arctic Blue vs. Nordic Asia Investment | Arctic Blue vs. Episurf Medical AB | Arctic Blue vs. Flexion Mobile PLC |
| Neola Medical vs. USWE Sports AB | Neola Medical vs. SaltX Technology Holding | Neola Medical vs. Axfood AB | Neola Medical vs. Catena Media plc |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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